The costs of U.S. employer-sponsored medical benefits are expected to rise seven per cent in 2024, according to a new survey by the International Foundation of Employee Benefit Plans.

The survey found 79 per cent of U.S. employers’ benefits plans are self-funded (with or without stop-loss coverage), while 21 per cent are fully insured.

The No. 1 reason cited for increasing costs was chronic health conditions (22 per cent), followed by catastrophic claims (19 per cent), specialty or costly prescription drugs and treatments (16 per cent) and medical provider costs (14 per cent).

Read: U.S. employers expecting health benefits costs to rise 5.6% per employee in 2023: survey

When asked what initiatives would have the most impact on managing costs, 22 per cent of employers cited utilization control initiatives (such as prior authorization and case management), followed by cost-sharing initiatives like deductibles and copays (16 per cent) and workplace and wellness programs (13 per cent).

“Plan sponsors have indicated chronic health conditions have a considerable effect on their medical expenses,” said Julie Stich, vice-president of content at the IFEBP, in a press release. “This ties to the data that disease management and wellness programs rank high in cost management strategies. In response to rising specialty prescription drug prices, employers are focusing on utilization strategies like case management to guide medication adherence and management of side-effects.”

Read: Employer-sponsored health benefits costs projected to rise 7.5% in 2023: report